External broker reports(aggregated public sources), Topline Securities

Topline Securities

External broker reports(aggregated public sources)

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Equity Bottom-Up

Sazgar Engineering Works Limited / Equity Bottom-Up

Sazgar Engineering Works Limited (SAZEW PK)

<ul><li>SAZEW announced its 1QFY26 result, wherein the company recorded profit of Rs4.4bn (EPS of Rs73.06), up 5% YoY. The result came higher than industry expectations due to higher-than-expected gross margins.</li><li>Net sales of the company surged by 28% YoY and 24% QoQ to Rs33.8bn in 1QFY26. This trend was largely driven by four-wheeler volumes, which increased 37% YoY and 26% QoQ, with sales clocking in at 3,557 units compared to 2,605 units in 1QFY25 and 2,817 units in 4QFY25.</li><li>We maintain our BUY call for SAZEW as company is currently trading at an FY26/FY27F PE of 6.5/5.3x.</li></ul>

SAZEW announced its 1QFY26 result, wherein the company recorded profit of Rs4.4bn (EPS of Rs73.06), up 5% YoY. The result came higher than industry expectations due to higher-than-expected gross margins.Net sales of the company surged by 28% YoY and 24% QoQ to Rs33.8bn in 1QFY26. This trend was largely driven by four-wheeler volumes, which increased 37% YoY and 26% QoQ, with sales clocking in at 3,557 units compared to 2,605 units in 1QFY25 and 2,817 units in 4QFY25.We maintain our BUY call for SAZEW as company is currently trading at an FY26/FY27F PE of 6.5/5.3x.

Sazgar Engineering (SAZEW): 1QFY26 EPS at Rs73.06, Up 5% YoY - Higher Than Industry Expectations

Thematic (Sector/Industry)

<ul><li>Topline Auto Universe is expected to post profitability of Rs18.4bn in 4QFY26, compared to Rs12.1bn in 4QFY25, reflecting a 52% YoY increase, primarily driven by increase in volumes by 30% YoY and change in sales mix.</li><li>On a QoQ basis, profitability is projected to rise by 7%, mainly due to increase in sales of Sazgar Engineering (SAZEW) as delivery of TANK 500 started this quarter.</li><li>Net sales are anticipated to increase 38% YoY and 8% QoQ to Rs188bn in 4QFY26, mainly due to higher volumes and improved sales mix led by a greater contribution from the higher-priced Fortuner, and the addition of the new TANK model.</li></ul>

Topline Auto Universe is expected to post profitability of Rs18.4bn in 4QFY26, compared to Rs12.1bn in 4QFY25, reflecting a 52% YoY increase, primarily driven by increase in volumes by 30% YoY and change in sales mix.On a QoQ basis, profitability is projected to rise by 7%, mainly due to increase in sales of Sazgar Engineering (SAZEW) as delivery of TANK 500 started this quarter.Net sales are anticipated to increase 38% YoY and 8% QoQ to Rs188bn in 4QFY26, mainly due to higher volumes and improved sales mix led by a greater contribution from the higher-priced Fortuner, and the addition of the new TANK model.

Pakistan Automobiles: Auto Profitability Likely to Rise 52% YoY and 7% QoQ; Volumes Up 30% YoY and 2% QoQ

<ul><li>Pakistan car sales (as reported by PAMA) clocked in at 22,741 units in Jun 2026, up by 4% YoY and 29% MoM.</li><li>This took FY26 cumulative sales to 206,445 units, up 39% YoY.</li><li>We expect the positive momentum in auto sales to continue in FY27, with double digit growth supported by the launch of new variants and the entry of new brands in the market.</li></ul>

Pakistan car sales (as reported by PAMA) clocked in at 22,741 units in Jun 2026, up by 4% YoY and 29% MoM.This took FY26 cumulative sales to 206,445 units, up 39% YoY.We expect the positive momentum in auto sales to continue in FY27, with double digit growth supported by the launch of new variants and the entry of new brands in the market.

Pakistan Automobiles: Car Sales Rose 39% YoY to 206,445 Units in FY26

<ul><li>Pakistan car sales (as reported by PAMA) clocked in at 17,660 units in May 2026, up by 19% YoY while down 20% MoM. This took 11MFY26 cumulative sales to 183,704 units, up 45% YoY.</li><li>The YoY rise was driven by new market entrants, new product launches, relatively lower inflation in previous months, and surge in auto financing.</li><li>MoM decline was driven by fewer working days in May due to Eid-ul-Adha holidays, leading to delayed deliveries, in our view. Some market speculation around a potential tax rate cut was also circulating, which may have further slowed sales.</li></ul>

Pakistan car sales (as reported by PAMA) clocked in at 17,660 units in May 2026, up by 19% YoY while down 20% MoM. This took 11MFY26 cumulative sales to 183,704 units, up 45% YoY.The YoY rise was driven by new market entrants, new product launches, relatively lower inflation in previous months, and surge in auto financing.MoM decline was driven by fewer working days in May due to Eid-ul-Adha holidays, leading to delayed deliveries, in our view. Some market speculation around a potential tax rate cut was also circulating, which may have further slowed sales.

Pakistan Automobiles: Car Sales Rose 19% YoY While Down 20% MoM To 17,660 Units In May 2026

<ul><li>Pakistan car sales (as reported by PAMA) clocked in at 22,015 units in Apr 2026, up by 107% YoY and 42% MoM. This took 10MFY26 cumulative sales to 166,044 units, up 49% YoY.</li><li>This rise was majorly driven by a rise in sales seen in Pak Suzuki Motor Company (PSMC) and Sazgar Engineering (SAZEW).</li><li>The impressive 107% YoY growth was driven by new market entrants, new product launches, relatively lower inflation in previous months, and surge in auto financing. To recall, auto financing reached 42-month high in Mar 2026 up 34% YoY and 3% MoM.</li></ul>

Pakistan car sales (as reported by PAMA) clocked in at 22,015 units in Apr 2026, up by 107% YoY and 42% MoM. This took 10MFY26 cumulative sales to 166,044 units, up 49% YoY.This rise was majorly driven by a rise in sales seen in Pak Suzuki Motor Company (PSMC) and Sazgar Engineering (SAZEW).The impressive 107% YoY growth was driven by new market entrants, new product launches, relatively lower inflation in previous months, and surge in auto financing. To recall, auto financing reached 42-month high in Mar 2026 up 34% YoY and 3% MoM.

Pakistan Automobiles: Car Sales Rose 107% YoY and 42% MoM to 22,015 Units in Apr 2026

Pakistan

Sazgar Engineering Works Limited was incorporated in Pakistan on September 21, 1991 as a Private Limited Company and converted into a Public Limited Company on November 21,1994. The Company is engaged in the manufacture and sale of automobiles, automotive parts and household electric appliances.

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Sazgar Engineering Works Limited (SAZEW PK)

Sazgar Engineering (SAZEW): 1QFY26 EPS at Rs73.06, Up 5% YoY - Higher Than Industry Expectations

SAZEW announced its 1QFY26 result, wherein the company recorded profit of Rs4.4bn (EPS of Rs73.06), up 5% YoY. The result came higher than...

Topline Securities

Pakistan Automobiles: Auto Profitability Likely to Rise 52% YoY and 7% QoQ; Volumes Up 30% YoY and 2% QoQ

Topline Auto Universe is expected to post profitability of Rs18.4bn in 4QFY26, compared to Rs12.1bn in 4QFY25, reflecting a 52% YoY increase,...

Topline Securities

Pakistan Automobiles: Car Sales Rose 39% YoY to 206,445 Units in FY26

Pakistan car sales (as reported by PAMA) clocked in at 22,741 units in Jun 2026, up by 4% YoY and 29% MoM. This took FY26 cumulative sales to...

Topline Securities

Pakistan Automobiles: Car Sales Rose 19% YoY While Down 20% MoM To 17,660 Units In May 2026

Pakistan car sales (as reported by PAMA) clocked in at 17,660 units in May 2026, up by 19% YoY while down 20% MoM. This took 11MFY26 cumulative...

Topline Securities

Pakistan Automobiles: Car Sales Rose 107% YoY and 42% MoM to 22,015 Units in Apr 2026

Pakistan car sales (as reported by PAMA) clocked in at 22,015 units in Apr 2026, up by 107% YoY and 42% MoM. This took 10MFY26 cumulative sales to...

Topline Securities

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